Market Remarks

Morning Notes – Monday April 12, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a down to sideways day – watch for a break above 4121.25 for clarity
  • No key economic data report due during the day:

Directional Bias Before Open:

  • Weekly: Uptrend
  • Daily: Uptrend Resumed
  • 120-Min: Up
  • 30-Min: Up-Side
  • 15-Min: Up-Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for S&P 500 are 4119.18, 4107.70, and 4097.15
  • Critical resistance levels for S&P 500 are 4129.48, 4140.35, and 4151.90
  • Key levels for E-mini futures: break above 4116.25, the high of 7:15 AM and break below 4104.50, the low of 1:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2021) closed at 4119.25 and the index closed at 4128.80 – a spread of about -9.50 points; futures closed at 4119.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are lower – at 8:15 AM, S&P 500 futures were down by -6.25; Dow by -51, and NASDAQ by -41.75

Markets Around The World

  • Markets in the East closed mostly lower – Seoul closed higher;
  • European markets are mixed
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • INR/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.666%, up +0.6 basis points from two weeks ago;
    • 30-years is at 2.339%, down -2.8 basis points;
    • 2-years yield is at 0.153%, up +0.9 basis points;
    • The 10-Year-&-2-Year spread is at 1.513, up from 1.516
  • VIX
    • At 17.47 @ 7:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  23.55 on March 25; low =  16.20 on April 9
    • Sentiment: Risk-Neutral-to-Off

The trend and patterns on various time frames for S&P 500:

Monthly
  • Confirmed Uptrend
  • March 2021 was a green candle with a small upper shadow and a lower shadow almost equal to the real body; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 75; broke above a downtrend line from January 2018
    • Above the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows is resumed
Weekly:
  • The week ending on April 9 was a green candle breaking away from previous weeks; almost no upper and lower shadows; at all-time highs
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is near 75
  • The week was up +108.93 or +2.7%; the 5-week ATR is 109.96
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4160.71, R1=4192.61, R2=4255.75; S1=4065.67, S2=4002.53; R1/R2/R3 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle that gapped up with almost no upper and lower shadows; at all-time intraday and closing highs
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 100% extension target near 3900.00 is achieved; 161.8% extension target is near 4140.00 levels
    • %K is above %D; near 100
    • RSI-9 is near 80; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Trending up since 10:00 AM on March 25; at all-time highs;  sideways since 2:00 PM on Friday
    • Broke above a down-sloping flag on March 26; the 100% extension target near 4100.00 is achieved;
    • RSI-21 is near 65; made few Bearish Divergences in the last few days
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
    • Moving sideways to down since 4:00 PM on Friday
      • RSI-21 declining since 3:30 PM on Friday after making a Bearish Divergence
      • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 2:45 AM
  • The Bollinger Band is relatively narrow and stable
    • Stochastic (9, 1, 3): %K is above %D around 30
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, April 9 in mostly higher volume. Dow Jones Transportation Average and Russell 2000 traded in lower volume.

For the week, Major US indices mostly closed higher in mostly lower volume. Russell 200 was down for the two Dow indices traded in higher volume. The Asian and the European markets were mixed. The dollar index closed down, energy futures were down, precious metals were up and industrial metals and soft commodities were mostly up for the week.

From Briefing.com:

The S&P 500 (+0.8%) and Dow Jones Industrial Average (+0.9%) set intraday and closing record highs on Friday, with the benchmark index topping the 4100 level for the first time. The Nasdaq Composite (+0.5%) overcame an early decline to close positive. The Russell 2000 (+0.04%) sneaked into the green amid a strong finish in the broader market. […]

The difference makers today came out of the heavily-weighted S&P 500 information technology (+1.0%) and consumer discretionary (+1.2%) sectors,

[…]

Buying activity increased noticeably into the close on no confirmed catalyst, with the health care (+1.2%), industrials (+1.0%), and financials (+0.9%) sectors rounding out the top spots. Conversely, the energy (-0.5%), consumer staples (-0.1%), and utilities (-0.1%) sectors closed slightly lower.

[…]

In the Treasury market, the 10-yr yield settled three basis points higher at 1.67%, or slightly lower than where it was trading immediately before, and after, the PPI data. The 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index increased 0.1% to 92.17. WTI crude futures decreased 0.5%, or $0.32, to $59.29/bbl.

[…]
  • The Producer Price Index for final demand increased 1.0% month-over-month in March (Briefing.com consensus +0.5%). The index for final demand, excluding food and energy, jumped 0.7% m/m (Briefing.com consensus +0.2%. On a year-over-year basis, the index for final demand was up 4.2% (highest since 12 months ending September 2011), versus 2.8% in February. The index for final demand, excluding food and energy, was up 3.1% yr/yr, versus 2.5% in February.
  • […]
  • Wholesale inventories increased 0.6% m/m in February (Briefing.com consensus 0.5%) following an upwardly revised 1.4% increase (from +1.3%) in January.
[…]
  • Russell 2000 +13.6% YTD
  • Dow Jones Industrial Average +10.4% YTD
  • S&P 500 +9.9% YTD
  • Nasdaq Composite +7.9% YTD
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